SINGAPORE (Jan 26): The managers of CDL Hospitality Trusts have declared a distribution per stapled security (DPS) for 4Q17 2.83 cents.
This is 5.7% lower than the 3.00 cents DPS announced in 4Q16 due to the enlarged stapled security base from its rights issue.
For FY17, DPS was 9.22 cents, lower compared to 9.63 cents in the same period last year.
Excluding the effect of the rights issue, DPS for FY17 would be 11.04 cents, an increase of 10.4% y-o-y.
In 4Q17, CDLHT recorded y-o-y growth of 9.8% in total distribution to stapled security holders to $33.9 million after retention for working capital.
Net property income (NPI) came in at $40.6 million, an increase of 7.8% compared to 4Q16. Inorganic contribution from The Lowry Hotel in Manchester, UK, and Pullman Hotel Munich in Germany boosted the portfolio’s performance.
Despite a competitive trading environment in Singapore, particularly with the opening of seven new hotels in 4Q 2017, its local portfolio recorded stable performance, says CDLHT's managers.
"Despite an increase in new supply and the absence of certain biennial events in 2017, such as the Singapore Airshow and Food & Hotel Asia, the Singapore Hotels managed to achieve a modest improvement in RevPAR for the quarter and posted only a fractional RevPAR decline for the year," says CDLHT's managers.
As at Dec 31 2017, an estimated 2,868 net rooms, representing 4.5% of existing hotel supply at end 2016, has entered the market.
Tourism demand in Japan continues to be healthy with visitor arrivals increasing 19.3% y-o-y to 28.7 million. However, price sensitivity of the economy accommodation market was heightened by rising supply. Consequently, the Japan Hotels registered y-o-y RevPAR decline of 4.6% for FY17.
Due to a strong line-up of sporting events such as the World Masters Games and British and Irish Lions Rugby Tour and increase in tourist arrivals, the NZ hotels achieved substantial y-o-y increase in RevPAR of 25.9% in FY17.
Its resorts in Maldives posted a collective y-o-y RevPAR decline of 14.7% for FY17 due to a competitive trading environment.
As at Dec 31, CDLHT has a gearing of 32.6% and debt headroom of $644 million.
In its outlook, CDLHT's managers say while Singapore room rates are likely to remain competitive in the near term as new hotels seek to build their base, supply growth tapers off from 2018 with an estimated 7696 net rooms or 1.2% of existing room stock opening in 2018.
Meanwhile, tourism demand in its overseas markets is expected to remain healthy.
Units in CDLHT closed at $1.82 on Thursday.
